Valaris (VAL) AI Stock Analysis

• Market Cap: $3.50B
• Dividend Yield: N/A
• Average Volume (3M): 1.28M
• Price to Earnings (P/E): 12.8
• Beta (1Y): 1.18
• Revenue Growth: 18.78%
• EPS Growth: -72.57%
• Country: US
• Employees: 4,130
• Sector: Energy
• Sector Strength: 68
• Industry: Oil & Gas Equipment & Services
• EPS (TTM): 1.61
• Shares Outstanding: 71,213,460
• 10 Day Avg. Volume: 1,060,840
• 30 Day Avg. Volume: 1,280,547
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 1.49
• Enterprise Value/Gross Profit: 5.71
• Enterprise Value/Ebitda: 4.95
• 1Y Price Target: $51.31
• Price Target Upside: 4.74% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

• Rating: 72 Outperform
• Price Target: $51.00 ▲(4.10% Upside)

Valaris's overall stock score is driven by its strong financial recovery and positive earnings call, which highlight significant contract awards and a positive market outlook. Technical analysis indicates some short-term weakness, but the stock's low P/E ratio suggests potential undervaluation. Corporate events further bolster the company's strategic positioning.

Valaris Business Overview & Revenue Model

Company Description

Valaris Limited provides offshore contract drilling services to the international oil and gas industry. The company owns an offshore drilling rig fleet of 56 rigs, which include 11 drillships, 4 dynamically positioned semisubmersible rigs, 1 moored semisubmersible rig, and 40 jackup rigs. It serves international, government-owned, and independent oil and gas companies in the Gulf of Mexico, the North Sea, the Middle East, West Africa, Australia, and Southeast Asia. The company was incorporated in 2009 and is based in Hamilton, Bermuda.

How the Company Makes Money

Valaris generates revenue primarily through the leasing of its offshore drilling rigs to oil and gas companies. These contracts can vary in duration and terms, often depending on the complexity of the drilling operation and the specific needs of the client. The company also earns money by providing integrated services that support drilling operations, including drilling management and engineering services. Valaris's earnings are influenced by factors such as global energy demand, oil and gas prices, and technological advancements in drilling practices. Strategic partnerships with major energy corporations and long-term contracts provide stability and predictability to its revenue streams.

Valaris Financial Statement Overview

Summary

Valaris has demonstrated a remarkable recovery across its financial statements. The income statement shows strong revenue growth and improved profitability. The balance sheet is stable with manageable leverage, although past fluctuations warrant caution. Cash flow metrics indicate robust cash generation and efficiency. Overall, Valaris is on a positive trajectory with significant improvements in financial health, positioning it well for future growth in the oil & gas equipment & services industry.

Income Statement

Valaris has shown a strong recovery in its income statement metrics. The TTM gross profit margin stands at 26.03%, indicating improved cost management compared to previous years. The net profit margin has also improved to 11.18% TTM, reflecting better profitability. Revenue growth is robust at 20.7% TTM, showcasing a positive trajectory. EBIT and EBITDA margins have strengthened to 24.54% and 29.99% TTM, respectively, indicating efficient operations. Overall, the income statement reflects a solid turnaround with significant growth and profitability improvements.

Balance Sheet

The balance sheet shows moderate stability. The debt-to-equity ratio is 0.50 TTM, indicating a manageable level of leverage. Return on equity is 12.40% TTM, which is a positive sign of profitability. The equity ratio is approximately 51.73% TTM, suggesting a strong equity base. However, the company has experienced fluctuations in equity and debt levels over the years, which could pose potential risks if not managed carefully.

Cash Flow

Cash flow metrics have improved significantly. The free cash flow growth rate is 185.14% TTM, indicating a strong recovery in cash generation. The operating cash flow to net income ratio is 0.87 TTM, showing good cash conversion efficiency. The free cash flow to net income ratio is 0.39 TTM, reflecting a positive trend in cash flow relative to earnings. Despite past challenges, the current cash flow position is strong and supports future growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.46B	2.36B	1.78B	1.60B	1.23B	1.43B
Gross Profit	641.10M	479.60M	139.50M	128.10M	-66.00M	-584.00M
EBITDA	738.80M	577.10M	254.20M	361.40M	-4.18B	-4.26B
Net Income	275.50M	373.40M	865.40M	176.50M	-4.49B	-4.86B
Balance Sheet
Total Assets	4.50B	4.42B	4.32B	2.86B	2.61B	12.87B
Cash, Cash Equivalents and Short-Term Investments	503.40M	368.20M	620.50M	724.10M	608.70M	325.80M
Total Debt	1.17B	1.17B	1.16B	551.80M	545.30M	15.70M
Total Liabilities	2.17B	2.18B	2.33B	1.56B	1.55B	8.50B
Stockholders Equity	2.33B	2.24B	1.99B	1.30B	1.06B	4.37B
Cash Flow
Free Cash Flow	232.50M	-99.70M	-428.60M	-79.50M	-124.90M	-345.50M
Operating Cash Flow	593.50M	355.40M	267.50M	127.50M	-66.00M	-251.70M
Investing Cash Flow	-330.70M	-452.30M	-665.80M	-16.70M	-3.70M	-42.00M
Financing Cash Flow	-156.90M	-158.30M	285.50M	-6.40M	388.70M	522.20M

Valaris Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 48.99
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VAL, the sentiment is Positive. The current price of 48.99 is above the 20-day moving average (MA) of 47.45, above the 50-day MA of 47.19, and above the 200-day MA of 42.68, indicating a bullish trend. The MACD of 0.62 indicates Negative momentum. The RSI at 55.89 is Neutral, neither overbought nor oversold. The STOCH value of 85.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VAL.

Valaris Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OII	79 Outperform	$2.44B	11.95	27.08%	―	8.14%	62.72%
TDW	78 Outperform	$2.98B	15.24	17.91%	―	7.76%	26.49%
WFRD	74 Outperform	$4.58B	9.96	35.14%	1.60%	-5.35%	-4.15%
VAL	72 Outperform	$3.50B	12.76	12.23%	―	18.78%	-72.57%
NOV	70 Outperform	$4.86B	10.76	7.31%	3.82%	-1.21%	-54.44%
MRC	67 Neutral	$1.27B	41.18	5.66%	―	-9.81%	-124.43%
Sector *	65 Neutral	$15.47B	7.31	3.20%	5.32%	4.22%	-60.66%

Valaris Corporate Events

Valaris Boosts Contract Backlog with New Deals

Valaris Limited announced a significant increase in its contract backlog, rising from approximately $4.2 billion to $4.7 billion since April 30, 2025. This growth is attributed to new contracts and extensions, including a 940-day extension for the drillship VALARIS DS-16 and a new 914-day contract for VALARIS DS-18 with Anadarko Petroleum Corporation. Additionally, Valaris secured a five-well contract offshore West Africa for VALARIS DS-15 and several jackup contract extensions in Qatar and the UK North Sea. The company also plans to sell jackup VALARIS 247 for approximately $108 million, expected to close in the second half of 2025. These developments are poised to enhance Valaris’s operational capacity and market positioning in the offshore drilling sector.

Valaris Holds 2025 Annual Shareholder Meeting in Bermuda

Valaris Limited held its 2025 Annual General Meeting of Shareholders in Bermuda on June 12, 2025, with 82.41% of shares present and voting. Key decisions included the election of directors, approval of executive compensation, and the appointment of KPMG LLP as the independent registered public accounting firm, reflecting strong shareholder engagement and support for the company’s governance and financial oversight strategies.